Rogers 2009 Annual Report Download - page 54

58 ROGERS COMMUNICATIONS INC. 2009 ANNUAL REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Saskatchewan Telecommunications Holding Corporation, acquired
spectrum only in Manitoba and Saskatchewan, respectively.
Through the auction, six new entrants acquired substantial
regional holdings of AWS spectrum, and several much smaller
companies acquired small amounts of spectrum in generally rural
locations. As per the “Advanced Wireless Services (“AWS”) Auction,
Roaming and Tower/Site Policy” (described above), Rogers has
entered into roaming agreements with a number of new entrants
at commercially negotiated rates. Consistent with the Policy,
Rogers has also reached commercial agreements for antenna tower
and site sharing with several new entrants. Roaming and tower
antenna and site sharing will enable new entrants to expand their
service coverage quickly. Currently, no single potential new entrant
has acquired spectrum sufficient to become a national licencee as
defined by Industry Canada to qualify for mandated roaming on a
national basis for 10 years. See above under “Wireless Regulation
and Regulatory Developments” regarding Advanced Wireless
Services (“AWS”) Auction, Roaming and Tower/Site Policy.
Globalive Wireless Management Corp. under the brand name,
WIND, launched service in December 2009 in Toronto and Calgary
with announced expansion to Vancouver, Ottawa and Edmonton
in early 2010. Quebecor Media Inc. has announced its intentions
to launch service in Quebec by the summer of 2010. Public Mobile
Canada Inc. has indicated that it expects to launch service in
mid-2010 in Ontario and Quebec. DAVE Wireless Inc., under the
brand name Mobilicity, has announced plans to launch in Toronto
in Spring 2010 and to launch in Vancouver, Ottawa, Calgary and
Edmonton later in 2010. In January 2010, Shaw Communications Inc.
announced that it was taking initial steps to commence wireless
activities, with build-out planned over the next several years.
Bragg Communications Inc. has made no announcements. New
entrants could also partner with one another or other competitors
providing greater competition to Wireless in more than one region
or on a national scale.
In November 2009, Bell Canada and TELUS each launched service
over their joint HSPA networks, overlaid on their code division
multiple access/evolution data optimized (“CDMA/EVDO”) based
wireless networks. Until this time, Rogers Wireless was the only
carrier in Canada operating on the world standard GSM/GPRS/
EDGE/HSPA technology. The Bell and TELUS HSPA launches enable
these companies to provide a wider selection of wireless devices,
and to compete for HSPA roaming revenues which are expected to
grow over time as HSPA becomes more widely deployed around the
world, both of which will increase competition at Wireless.
Cable Competition
Canadian cable television systems generally face competition
from several alternative Canadian multi-channel broadcasting
distribution undertakings (including Bell TV and Star Choice
satellite services and telephone company IP TV services), satellite
master antenna television, and multi-channel, multi-point wireless
distribution systems, as well as from the direct reception by antenna
of over-the-air local and regional broadcast television signals. They
also face competition from illegal reception of U.S. direct broadcast
satellite services. In addition and importantly, the availability
of television shows and movies streaming over the Internet has
become a direct competitor to Canadian cable television systems.
Cable’s Internet access services compete generally with a number
of other Internet Service Providers (“ISPs”) offering competing
residential and commercial dial-up and high-speed Internet access
services. Rogers Hi-Speed Internet services, where available,
compete directly with Bell’s DSL Internet service in the Internet
market in Ontario, with the DSL Internet services of Bell Aliant in
New Brunswick and Newfoundland and Labrador, and various DSL
resellers in local markets.
Cable’s Home Phone services compete with Bell’s wireline phone
service in Ontario and with Bell Aliant’s wireline phone service
in New Brunswick and Newfoundland and Labrador. In addition,
Rogers Home Phone service competes with ILEC local loop resellers
(such as Primus) as well as VoIP service providers (such as Vonage
and Primus) riding over the services of ISPs.
Rogers Retail competes with other wireless dealers and DVD and
video game sales and rental store chains, as well as individually
owned and operated outlets and, more recently, online-based
subscription rental services and illegally downloaded content
as well as distributors of copied DVDs. Competition is principally
based on location, price and availability of titles.
One of the biggest forces of change in the telecommunications
industry is substitution of the traditional wireline video, voice and
data services by new technologies. Internet delivery is increasingly
becoming a direct threat to voice and video service delivery.
Younger generations increasingly use the Internet as a substitute
for traditional wireline telephone and television services.
The use of mobile phones among younger generations has
resulted in some abandonment of wireline telephone service.
Wireless-only households are increasing although the vast majority
of homes today continue to use standard home telephone service.
In addition, wireless Internet service is increasing in popularity.
Media Competition
Rogers’ radio stations compete with the other stations in their
respective markets as well as with other media, such as newspapers,
magazines, television, outdoor advertising and the Internet.
Competition within the radio broadcasting industry occurs
primarily in individual market areas, amongst individual stations.
On a national level, Media’s radio division competes generally
with other larger radio operators, which own and operate radio
station clusters in markets across Canada. Additionally, over the
past several years the CRTC has granted additional licences in
various markets for the development of new radio stations, which
in turn provide additional competition to the established stations
in the respective markets. Two licenced satellite subscription-based
radio services also provide competition to Media’s radio stations.
New technologies, such as online web information services, music
downloading, MP3 players and online music streaming services,
provide competition for radio stations’ audience share.
The Shopping Channel competes with various retail stores,
catalogue retailers, Internet retailers and direct mail retailers for
sales of its products. On a broadcasting level, The Shopping Channel
competes with other television channels for channel placement,
viewer attention and loyalty, and particularly with infomercials
selling products on television.